Shaw Notes Economic Stability Not Questioned in Budget Debate

Minister of Finance and the Public Service, Hon. Audley Shaw, has noted that during the 2010/11 Budget Debate, which ended Wednesday (April 21) at Gordon House, the stability of the Jamaican economy was not questioned.
“Despite the many challenges that we have faced, no one has questioned the stability that now exists in the Jamaican economy,” Mr. Shaw said, as he closed the debate.
He said that, according to the inflation outturn for March this year, released by the Statistical Institute (STATIN), inflation slowed to 0.5 per cent compared with 1.4 per cent in January and 2.2 per cent in February.
“This brings inflation for the fiscal year 2009/10 to 13.3 per cent, which is just under the upper end of our projections,” the Minister said.
He said that that outturn has proven wrong pundits who were predicting that inflation would be between 15 per cent and 20 per cent. He added that the showing in March was a good indicator of achieving a lower rate in 2010/11, consistent with projections of 71/2 per cent to 9 per cent.
Turning to the exchange rate, Mr. Shaw noted that since the start of 2010 and up to Wednesday (April 21), it had appreciated by 0.57 per cent (51 Jamaican cents). He said that the 0.78 per cent depreciation of the dollar in 2009, compared favourably with the 70 per cent for the 18 years up to 2007.
Mr. Shaw also pointed to the US$1.78 billion in the Net International Reserves (NIR), with gross reserves covering 17.6 weeks importation of goods and services. In addition, he said remittance inflows data showed a 7.4 per cent increase over February, 2009, following a 1.5 per cent growth in January.
The Finance Minister noted that the cut in the budget to $503.9 billion represented the largest cut, in both nominal and real terms, in the nation’s history. He also alluded to the number of loss-making public entities being privatized to reduce the burden on the public purse, and the administrative and legislative reforms being undertaken to establish a Fiscal Responsibility Framework (FRF).
He said that the Stand-By Arrangement with the International Monetary Fund (IMF) and the overwhelming multilateral support will ensure adequate availability of foreign exchange reserves, while observing principles of prudent financial management and debt sustainability.
“The Government is committed to a balanced budget by 2013, realising the national outcomes of a stable macroeconomy, an enabling business environment, effective governance, strong economic infrastructure and internationally competitive industry structures,” Mr. Shaw stated.
“We have taken tough decisions; we have taken strong and even unpopular action; we have demonstrated the necessary leadership to make this vision a reality,” he said.
He stated that an opportunity was being offered to make a lasting difference for generations to come, if the country was willing to share the sacrifice and the collective vision.
“If we hope together, endure together, and work hard together we will achieve together,” Mr. Shaw said.